Japan’s two major shipping companies officially launched cooperation

Japan’s two largest shipbuilding companies-Imabari Shipbuilding and Japan Shipbuilding Union (JMU), the long-awaited cooperation has finally officially started. The newly established joint venture “Nihon Shipyard” will be named “Japan”, and its goal is to lead the development of the entire Japanese shipbuilding industry to fight against the Chinese and South Korean shipbuilding industries that have advantages in price and market share.

On January 6, Imabari Shipbuilding and JMU held a joint press conference to announce the merger of some businesses. Imabari Shipbuilding acquired 30% of JMU’s shares and became a major shareholder of JMU, and established a joint sales and design company “Nippon Shipbuilding” with JMU.

The newly-established “Nippon Shipbuilding” president is Maeda Akira, director of JMU Corporation. At the meeting, President Masatori Maeda stated that the company named “Japan” in order to lead the Japanese shipbuilding industry and retain the shipbuilding industry in Japan. Vice President Kiyoshi Higaki (Imabari Shipbuilding Specialist) pointed out: “We are proud to write’Japan’ into the company name, and we will do our best to protect and develop the Japanese shipbuilding industry.” The two companies implemented a partial merger. In creating a joint environment that can accommodate various shipbuilding, and minimize costs, gain opportunities to compete with the shipbuilding industry of China and South Korea.

At the same time, Mr. Yoshito Higaki, the president of Imabari Shipbuilding, mentioned that at the end of last year, Japan Ocean Network Shipping (ONE) announced that it signed a long-term charter contract for six 24000TEU ultra-large container ships with Masae Steamship. These six new ships will be built by Imabari Shipbuilding Built with JMU. Among them, 4 of Imabari Shipbuilding will be built by Marugame Business Headquarters and 2 at Saijo Plant. The other 2 will be built by JMU’s Kure Plant.

Yukito Higaki said that relying only on a shipyard in the Marugame Division of Imabari Shipbuilding would not be able to meet the delivery date set by ONE in 2023. He therefore emphasized the importance of cooperation with JMU and said that ONE’s new shipbuilding project is “a celebration of’Japanese shipbuilding’ Projects started”.

It is understood that Imabari Shipbuilding and JMU reached an agreement on a joint venture in March last year to integrate the sales and design departments of bulk carriers and oil tankers.

The capital of the new company is 100 million yen, of which Imabari Shipbuilding will invest 51%, JMU will invest 49%, and it has approximately 500 employees. According to the plan, “Nippon Shipbuilding” will target all general commercial ships except LNG ships, and its business scope includes marketing, planning and development, joint research, order sales, contracts, basic design/approval production, and offshore construction by Imabari Shipbuilding and JMU. Wind power-related equipment business combines JMU’s strong strength in energy conservation and other environmental-related technologies, as well as the advantages of Imabari Shipbuilding’s extensive sales network for Japanese and overseas shipowners.

Maeda pointed out: “By strengthening the ability to receive orders, design capabilities, and cost competitiveness, we will help Japan Shipbuilding, which has advantages in autonomous navigation and other technical capabilities. We hope to differentiate from other companies and respond to zero emissions. The trend of environmentally friendly ships and autonomous navigation, forecast demand in advance to win orders first.”

It is understood that Imabari Shipbuilding and JMU reached an agreement on the basic matters of cooperation in November 2019. The two sides hope to achieve common parts and manufacturing methods through this capital business cooperation, increase the number of large orders, and reduce the cost of each shipyard.

As the antitrust review process took longer than expected, the cooperation between Imabari Shipbuilding and JMU experienced three delays last year. In December of last year, Imabari Shipbuilding and JMU announced that they would implement a cooperation plan in January this year. JMU will increase its capital by about 35 billion yen. Imabari Shipbuilding will also acquire 30% of JMU’s equity and become one of the major shareholders.

JMU plans to use the raised funds for shipyard equipment investment and environmental protection ship research and development. Among them, JMU will introduce welding robots and cranes to shipyards such as the Tianjin Office and Ariake Office to improve production efficiency, so as to compete with the Chinese and Korean shipping companies that can obtain government support and have new equipment.

As the two largest domestic shipping companies in Japan, Imabari Shipbuilding, ranked first, and JMU, ranked second, account for 50% of the domestic construction volume in Japan and 12% of the global market.

Among them, Imabari Shipbuilding is the shipbuilding group with the largest number of completed shipbuilding in Japan. It has 10 shipyards in Japan and can build more than 90 ships every year. The group has about 12,000 employees. Sales as of March 2019 were 391.1 billion yen.

In 2018, there were 78 orders in hand, and the number of orders in hand ensured about 3 years of work. JMU is the second largest shipping company in Japan, second only to Imabari Shipbuilding. It has about 7,500 group employees and a 1,000-person design team. As of 2018, it has 24 orders, including 3000TEU container ships, bulk carriers, and VLCCs.

This article is reproduced from State Reading Network.

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